Netflix added the fewest number of new subscribers last year since launching in the UK a decade ago, as the cost of living crisis and a post-pandemic “reset” in growth among streaming services hit the US company. Netflix UK, which has enjoyed annual subscriber growth rates of about 20% in recent years and was buoyed by coronavirus lockdowns, managed to grow its British base by just 4% last year. Netflix is the UK’s most popular streaming service with almost 15 million subscribers. However, the company is thought to have managed to add only a few hundred thousand new members last year, the smallest number since the streaming site launched in the UK in 2012. Despite the slowdown, Netflix managed to increase revenues from British subscribers by 12% to £1.54bn, from £1.38bn in 2021, after raising prices for a second time in two years in March last year. The streaming service was able to retain subscribers in part due to the popularity of Harry & Meghan, the six episode documentary following the Duke and Duchess of Sussex, part of a multi-year deal signed in 2020. As it reported its UK financial results for 2022 on Tuesday, the company said that, on average, British users paid 14% more a month last year than they did in 2021. “Streaming services are facing a tougher market than they have ever experienced,” Richard Broughton, a media analyst at the research firm Ampere, said. “Belt-tightening among consumers, heavier competition, and saturation are all playing their part.” The company’s main British business, Netflix Services UK, reported a pre-tax profit of £34m last year and paid £7.5m in corporation tax. This is up from £27.9m profits and £5.2m in UK corporation tax in 2021. Across the company’s five UK operating businesses – which also include production, studios, animation and its business with the estate of Roald Dahl – the company paid a record £13.1m in corporation tax. The UK tax contributions of big US tech companies have long been scrutinised. The Facebook and Instagram owner Meta paid £30m in corporation tax on UK revenues of £1.89bn, according to the company’s most recent Companies House accounts for 2021. However, Meta is estimated to have made about £6bn in ad revenue in the UK that year, according to Insider Intelligence. Google, which also owns YouTube, paid £200m in UK corporation tax on £1.1bn in profits in the 18 months to the end of 2021. While the company reported £3.4bn in turnover, it is estimated that Google made about £9.6bn in ad revenue in the UK that year. Despite the tightening market conditions, Netflix continued to hire staff at a rapid rate. Total UK employee numbers rose more than a quarter year on year from 396 to about 500 at the end of 2022. Netflix also continues to invest heavily in UK-made productions, which include the newly released David Beckham documentary, The Crown and Heartstopper, spending $6bn (£5bn) on TV shows and films between 2020 and this year. “This is an increase of nearly 50% on what we originally anticipated and has created thousands of jobs right across the country,” said a spokesperson for Netflix UK. “The UK is our most important production hub outside North America and we are deeply committed to making Netflix series and films here.” US streaming companies have recently focused on increasing the profitability of their existing user bases, and attracting more cost-conscious consumers, in the new slower-growth environment. Netflix has cracked down on password-sharing users as the company estimated there are 100 million non-paying users who freeload through friends and family, and has also launched a lower priced, ad-funded tier. “Strategies such as Netflix’s account-sharing initiative and cheaper ad-supported tiers are important,” said Broughton. “They are helping to address the issue of a shrinking addressable market and the impact of the recent economic slowdown.” Netflix’s new initiatives have prompted something of a recovery with its shares, which are listed in the US, up more than 30% so far this year. In the most recent results for the second quarter, the company added 5.9 million new subscribers – almost three times as many as analysts had forecast – taking its global total to 238 million. Netflix made a profit of $1.8bn in the quarter as revenues topped $8.3bn.